According to the tax regulations, all management expenses and expenditures incurred by taxpayers in order to generate taxable profits during any period of their business operations can be deducted. Taxpayers often set up a limited company to hire him/herself as a director to manage the company’s business and help the company run the company, so as to get the director’s remuneration paid by the company. In addition, the company can also provide directors’ domicile benefits (such as paying rent). The company deducts the payment of his remuneration and domicile benefits, of course, it can save profits tax.
As the director’s employer, the company will report director’s remuneration and domicile benefits in the relevant year of assessment to the Inland Revenue Department. The director needs to fill in the remuneration and domicile benefits in the salaries tax section of the individual’s tax return. Since the director can claim the relevant allowance under salaries tax, this can greatly reduce his overall tax payment.
The above information is for reference only. If in doubt, we welcome your tax inquiries